This chart seems to indicate that there are different groups within pirates. As is obvious from the chart, the group on the left side is more likely to have bought music recently than 'non-pirates' (people who engage in filesharing less than once a month or never). I thought this was an interesting result from the survey, especially since some people are generally too quick to disqualify pirates as economically interesting music consumers.

I asked surveyees to respond to the statement "One US dollar ($1.-) is not too much to ask for a song." This resulted in two groups that were almost evenly split. Around half of the respondents agreed, and the other half disagreed. This indicates that prices of music should perhaps be much more variable than they are today and real attention needs to be paid to one's target group when trying to sell copies.

Instead of inventing numbers to argue how things should be - as a marketeer, I'm much more interested at looking at the reality and using that reality to maximize the potential. So what do you do when your business model (that relies on control) gets disrupted through peer-to-peer filesharing and other types of non-linear communication? You adjust to the new reality and make use of that non-linear communication.

The solution that originates from this non-linear communication is 'the ecosystem' and this excerpt from my thesis probably describes it best:

The ecosystem is an active fanbase which is interconnected through non-linear communication. This means producing a story worth telling to turn the internet's non-linear communication and loss of control over distribution into an opportunity to get discovered. The second step is retaining the attention by connecting with listeners and connecting them to each other like the host of a party would with guests. Turning the ecosystem into a fun party helps energize the fanbase and amplifies the aforementioned "story that's worth telling". Marketing opportunities come from listening to the ecosystem and releasing the products they want, as opposed to the classic approach of pushing the product that you want them to buy. Internet-enabled concepts such as pre-ordering and digital releases allow labels to offer their ecosystem abundant choice to play into all the different expectations regarding price and product characteristics. This most likely will involve a mix of (feels like) free and publishing products or services that are better than free.

The answer is the ecosystem. Note that in the below picture, both the artist/label as well as the target audience are part of the same ecosystem.

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What constructive can I bring here? This post just goes over old ground, most of it debated before. Some of it has been debunked, some of it has been proven less than honest, and the whole "ecosystem" is just a retread of the same tired ideas that have been stated and restated here for the last 5 years.

The "pirates buy more music" thing is always a laugh, because it never considered how much music these pirates would buy if they couldn't pirate all that stuff. There is no indication that they would buy more, buy less, or anything else, only proof that the pirates are the same small group of people who have a high interest in music, regardless of piracy. 20 years ago, they were the super fan that spent hours in the record stores flipping discs, checking out the latest club mixes, and spending every spare dollar on the record collection. Now they shop online, using piracy as their sample bin, and buy some of it.

There is no indication that their buying habits are any different from the same group 20 years ago. Nobody has been able to explain away that issue.

So Jeff, as much as I appreciate your name calling and trolling, I have to say there isn't really much to add to the discussion, because we have all run this one flat 100 times before.

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I can tell you right now how much music I would buy from any of you people.

Zero, nada, zilch, null, nothing.

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pirates are the same small group of people who have a high interest in music

If pirates are such a small group of people why all the fuzz about it all, they can't possible influence the market in small numbers and they don't buy anything, so why are they persecuted?

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Now they shop online, using piracy as their sample bin, and buy some of it.

Or could it be that people have a fixed income and they need to choose what to spend on and the options have grown dramatically over the years?

You know when people buy MP3 players they of course will stop buying CD's because everybody knows you can't play a CD with an MP3 players, well everybody except you apparently. How many people do you know buy Vynil when they don't have a place to play it? Did you ever see anybody buy a cassette tape and not have a cassette player?

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There is no indication that their buying habits are any different from the same group 20 years ago. Nobody has been able to explain away that issue.

I don't get it, if they didn't change why are you complaining, they buy the same apparently according to your own words.

You keep pretending things are your way, and reality keeps hitting you in the face, if we are in a game of wack a mole you are the mole dude.

Besides there is nothing you or any government in the world can do about piracy.
I'm ripping a DVD right now, what you gonna do about it?
Nothing because there is nothing you can do, I will also distribute a copy to all my family and friends just because a) I'm pissed and b) I can, just like people like to pretend the law means anything when it comes to my home, I will die before I let you screw ups do any of that.

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The "pirates buy more music" thing is always a laugh, because it never considered how much music these pirates would buy if they couldn't pirate all that stuff.

Which is funnier? An analysis of today's reality and comparing actual (if estimated) stats and demographics? Or a hypothetical statistic that predicates time travel and a reversal of technology to a previous era? I find the bigger laugh on the latter.

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There is no indication that their buying habits are any different from the same group 20 years ago. Nobody has been able to explain away that issue.

What issue? That people don't buy everything they hear?

I hear plenty of music on the radio, in stores, at other people's houses, and I don't buy it just because I heard it. Heck, yesterday a song came on the car radio and if I had a gun I'd've shot the thing, I hated it that much. There's some music you'd have to pay me to listen to.

You think those superfans of yesteryear weren't trading tapes with other superfans? Taping off the radio? Buying used records? What's different between then and now?

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By the way the movie industry is next, something I realized is that smartphones are actually video players that can be connected to TV sets, those days of DVD's, BluF'ingray nonsense are coming to an end.

What you call piracy will grow exponentially from here on.

And the only thing you can do is complain about it.
You can cry, you can stump your feet on the ground but it won't change the outcome.

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Hey, you dinosaur, don't you remember how it was before the recording/movie industries? How there wasn't any content to listen to for anyone? How there was nothing to see before they started making movies? Did you see how the people like Beethoven, Vivaldi, Liszt(omania!) were starving strangers out on the streets because there was no one to record their music for everyone to hear? Do you remember how Handel, Verdi, and Mozart were left out to freeze to death, virtually unknown to the world, because no one saw the movie release of their operatic works?

Boy, I sure hope those recording/music industries don't die - we may have to go back to those dark old days of unknowns and no one making economically viable content.

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"When it is no longer economically viable to produce the content you are all pirating, you will be left with little."

Funny, the amount of new work being released under open licenses like the creative commons seems to be growing steadily.

The Banshee music player links to more free content than I could ever listen to, and I've wasted more hours than I would like to admit sitting in front of YouTube. The cost of creating high-quality content has been dropping consistently over the past 20 years, and that drop in production costs has vastly accelerated in the last 3 years.

All this free stuff has lead to far more content being available. Too much content. The issue that must be addressed now is one of filtering, not production.

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"When it is no longer economically viable to produce the content you are all pirating, you will be left with little."

When that happens, sure, but such a thing will never happen. That "when" is a hypothetical that will never occur.

When dogs evolve to be as smart as humans, they will rule the world. See, I can come up with bogus hypotheticals too.

People have made great music in the past without IP, and if IP were abolished today, there will be no lack of good music being created.

Your sentence assumes that IP is the only economically feasible way to create music. FUD. That is a lie and you know it. There is plenty of evidence showing you to be wrong. Beethoven, Mozart, and today music gets released under CC licenses all the time.

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"When it is no longer economically viable to produce the content you are all pirating, you will be left with little."

When that happens, sure, but such a thing will never happen. That "when" is a hypothetical that will never occur.

When IP maximists grow a brain, they will learn to create content. See, I can come up with bogus hypotheticals too.

People have made great music in the past without IP, and if IP were abolished today, there will be no lack of good music being created.

Your sentence assumes that IP is the only economically feasible way to create music. FUD. That is a lie and you know it. There is plenty of evidence showing you to be wrong. Beethoven, Mozart, and today music gets released under CC licenses all the time.

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"When it is no longer economically viable to produce the content you are all pirating, you will be left with little."

When that happens, sure, but such a thing will never happen. That "when" is a hypothetical that will never occur.

When IP maximists grow a brain, they will learn to create content. See, I can come up with bogus hypotheticals too.

People have made great music in the past without IP, and if IP were abolished today, there will be no lack of good music being created.

Your sentence assumes that IP is the only economically feasible way to create music. FUD. That is a lie and you know it. There is plenty of evidence showing you to be wrong. Beethoven, Mozart, and today music gets released under CC licenses all the time.

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"The "pirates buy more music" thing is always a laugh, because it never considered how much music these pirates would buy if they couldn't pirate all that stuff."

Because the people "pirating" have an infinite income and would instantly buy everything they're interested in rather than renting, buying used (both of which the majors seem to want to kill) or simply going without.

If you believe this, it's no wonder your industry fails.

"20 years ago, they were the super fan that spent hours in the record stores flipping discs, checking out the latest club mixes, and spending every spare dollar on the record collection. Now they shop online, using piracy as their sample bin, and buy some of it."

Erm, what's your argument here? You just admitted that pirates buy music. You also just admitted that nothing's really changed (do you think those guys 20 years ago were buying everything they checked out while flipping those discs? If not, what's the difference between doing that in a store and doing it online?).

"There is no indication that their buying habits are any different from the same group 20 years ago. "

So, what's the problem? Why are you so keen to attack them if nothing's changed since the industry's sales high point?

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Also, would it hurt if you called music - music, not "content"? If you respect the frame - iPod - enough to buy it (and respect IP on patent as well), why not respect the painting - music - and call it just that?

Yes, music industry, music production... music creativity era is over. Never again 60's, 80's (or 90's for those who loved them). We used to go to space, now we go to Walmart and Facebook.

All thanks to great piracy supporting legal theories like the one above. It saves you 1$ per song. You must be really poor?

Funny, since I suspect that every job you are in generates some sort of property for you, even if not intellectual?

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B...Ban...Banshee? After centuries of Bach, Mozart, Coltrane and Rolling Stones, you send me to Banshee?? I saw Night of the living dead, now you want me to watch family holiday videos on UTube??? What comes next? "Daily" on iPad and TV talent shows?

We will go down in history as generation that produced tons of free worthless web-noise at minimum cost, to save on investments in what you might call "high quality content" and what used to be called art.

The funny thing with the copyright fanatics is that scientific works are met with total disregard and accusations of dishonesty, while the unsupported claims of big media are irrefutable "industry experience".

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"I never knew a recordable medium is a must? Why ignore sponsors, state support and sheet music publishing?"

I must have misunderstood you, then? You're now admitting that there's other ways for artists to fund their work and make a living other than selling copies? That the medium is irrelevant when it comes to the artist's motivation to create?

"Wouldn't you agree that they are an attempt to embrace and monetize the new age free content concept?"

No, I wouldn't. TV talent shows are almost as old as TV itself (and was broadcast to viewers free of charge, of course!), and they're produced because they're making money under that traditional model. The Daily requires a paid subscription past the first 2 weeks. They're about as far away from the new models as you can get without manufacturing and distributing physical goods.

"After decades of cinematic re-releases, it grossed $12 million domestically and $18 million internationally

A lot of money has been made from the film, almost none of it by Romero and Russo. This doesn't change the fact that it is available on YouTube for free, right next to the cat & wedding videos you keep bringing up.

It's also funny that your major example of a quality product is a movie made by first-time filmmakers for virtually no money. Aren't those the same people you're attempting to slate?

"Millions. But what would be the point?"

You might eventually find one that actually proves whatever points you're trying to make. At the moment, it seems that you're trying to show that work not created under the corporate models is inferior, yet your own examples prove this assertion false.

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Paul, the point isn't that they have infinite income. You are attempting to create a bizarre absolute where one doesn't exist. That is never the issue, never the point.

Before piracy, if they wanted music, they bought music. They might choose music over eating out at a restaurant, or perhaps choose it over buying say a new shirt or something. With piracy, they now no longer have to make the choice, they just download the music and buy the shirt.

They may still buy music, but if they were actually buying the music they consume, they would buy more. It is likely that the real answer would be in the middle, they would buy less than all that they consume in a piracy market, but they would likely buy more than they do now.

Since we know recorded music sales are way down, it is a good bet (I don't have correlating data) that the biggest buyers aren't buying as much as before. We know it isn't the product, because they are still pirating the product at an incredible level, they still want it. They just no longer feel the need to pay for it.

It would be incredibly interesting to see how the "pirate" buyers stack up against the big buyers of the past. We might discover that they are really the same person, just at a different time.

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Hmmm... I don't see any facts. I see a lot of bare assertions, all based on a faulty assumption that there's money directly being lost, even though you admit that "pirates" are still buying music. Are they buying at the same levels as before? I don't know. I know I used to buy a lot of music, now I buy very little, yet I don't pirate...

As ever, you're just making assumptions based on your own opinion, and then assuming your is right and mine is wrong without backing it up with data. I know hard data is hard to come by, but at least I try to communicate my own experience rather than assuming everyone who doesn't agree is a criminal.

The simple fact is that some people could buy more music, but many are already paying what they can afford. Blocking the free access won't make them able to afford more purchases.

"Since we know recorded music sales are way down, it is a good bet (I don't have correlating data) that the biggest buyers aren't buying as much as before."

Heh, funny that you assert that the same week this is reported: http://www.bbc.co.uk/newsbeat/14068433. Not a massive rise, but all the reports I'm seeing credit higher quality product with a rise in sales. Not rocket science here - maybe if more quality product were released, people wouldn't feel the need to sample the product illegally before purchase?

Even if this is just a blip and sales continue to fall, why is that? Is it just piracy plain and simple? Or, is it a combination of lower quality product, unbundling, the economic downturn, greater competition from other media and lack of access to some services (Spotify already accounts for 3% of European web traffic, how much will it account for in the US when it's launched?)? Why ignore every other factor in favour of just "piracy"?

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Before piracy, if they wanted music, they bought music.

Radio has been free for listeners nearly since its inception. You act as though nothing was free until pirates hoisted their flag.

They might choose music over eating out at a restaurant, or perhaps choose it over buying say a new shirt or something. With piracy, they now no longer have to make the choice, they just download the music and buy the shirt.

Isn't it great! Music is not a life sustaining good and we can purchase necessities (food and clothing) with our scant resources (money) and still get music for free, or close to that. Most people are willing to pay for content if the price is reasonable and the terms of purchase are just (no drm or rootkits). Quite a few do that already and more "pirates" would buy if prices went lower than $1.29 per song. But some will never buy and your solution is that somehow every single person must pay you!? But that isn't your job to figure out. No! It is Google or Amazon or Apple who has to figure that out for you.

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I am sorry.. I think I was probably (intentionally) misunderstood. Every creative artistic process in history so far stood a chance to get monetized in one way or another.

My point is simply that digital "free content" idea can't motivate or even cover the expenses of quality production, yet it became the most comfortable way to enjoy authors works.

While we debate the obvious, hardware manufacturers, ISP's, Banshee, Utube and others make millions on someone else's work. It is considered to be a good business model. When "content creators" want to do about the same, only in a far less demanding way, it is called corporate greed...

Hypocritical, isn't it? There can be no future in global capitalist profit making game that will recognize only one exemption - IP. Yea..lets have free content, but why stop there? Lets have free medicare, internet xs, mobile phones, food, sailboats and sports cars as well? I am sure creators wouldn't mind that. They were forced to be the first to accept their share of radical socialism anyways.

It is irrelevant where the incentive comes from, as long as it is there, under fair terms. So my question to you is - where is it?

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"Every creative artistic process in history so far stood a chance to get monetized in one way or another. "

...and it's only in recent history that said monetisation was expected to come from shifting plastic discs, and throughout history only a small percentage have actually done so successfully.

"My point is simply that digital "free content" idea can't motivate or even cover the expenses of quality production, yet it became the most comfortable way to enjoy authors works."

You seem to be confusing several points here. First, you seem to be assuming that the chance to profit is a primary motivation for the creation of art. This is not true for most actual artists.

Secondly, you appear to be presuming that the expenses of quality production cannot be recouped without selling copies of the resulting work, yet this has been done successfully for many years (e.g. TV, broadcast radio, the examples of Bach, Mozart, et al.). There are many ways to make money that are not affected by piracy.

Thirdly, you're missing the point that it's the consumer that gets to decide how they wish to enjoy the content offered. I personally prefer digital, portable formats but I'm not willing to pay $1.29 per track or suffer DRM. If you're not willing to offer me the product I wish to consume, I will not buy it.

No they don't, and that's a moronic statement. They provide their own goods and services, which people like to use. Sometimes this involves 3rd party content, sometimes not. They are making money from the services they provide. If the content creators want to offer the same services and reap the benefits directly, they're free to do so, but right now they're not.

Also note that your argument also applies to TV and radio manufacturers, photo frame makers and telephone companies. Should they all pay up because their products require party content not created by the manufacturer?

This is an astoundingly stupid argument, and one that you and your ilk seem to be repeating constantly. Try to work out why this is ridiculous (hint: none of your example involved infinitely reproducable content).

"It is irrelevant where the incentive comes from, as long as it is there, under fair terms. So my question to you is - where is it?"

It's already here. Not my fault if you can't see it, or expect to be able to make money without having to work for a living because you happened to record something.

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This mythical and ever so expensive 'quality production' you keep regurgitating fascinates me; is it a fetishistic adherence to some weird variation of 'you need to spend money to make money' that you can't find a way around, or do you honestly believe that money spent is the only benchmark for quality?

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"Every creative artistic process in history so far stood a chance to get monetized in one way or another. "

"...and it's only in recent history that said monetisation was expected to come from shifting plastic discs, and throughout history only a small percentage have actually done so successfully."

Hm..yes.. I think it was because people wanted to buy em discs. The sheet music market failed to deliver. Point being?

"You seem to be confusing several points here. First, you seem to be assuming that the chance to profit is a primary motivation for the creation of art. This is not true for most actual artists."

You would be surprised how greedy artists can get. They want to eat daily and pay the electricity bills - or their amps won't work.

"There are many ways to make money that are not affected by piracy."

There WERE many ways... Now there are ways to make money WITH piracy. It only ends up in the wrong pocket.

"If you're not willing to offer me the product I wish to consume, I will not buy it."

Don't. Don't buy it. DOn't steal it either. Just ignore it. It will do mirracles on the market.

"No they don't, and that's a moronic statement. They provide their own goods and services, which people like to use."

You like to stare at blanks screens, don't you?

"Also note that your argument also applies to TV and radio manufacturers, photo frame makers and telephone companies. Should they all pay up because their products require party content not created by the manufacturer?"

No. They should exploit 3rd party without mercy until there is none left. After that, they can start another business. Supermarket chain. Not that many around.

"It's already here. Not my fault if you can't see it, or expect to be able to make money without having to work for a living because you happened to record something."

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My point is simply that digital "free content" idea can't motivate or even cover the expenses of quality production, yet it became the most comfortable way to enjoy authors works.

As opposed to consume it for free on the radio or TV right.
Is not the people that got a problem is you who are unable to create and eco-system that people want to float around, if you need to ask where is it, then you don't deserve profits you deserve to go to the bottom.

You keep trying to insinuate that piracy is something new, it is not as people have noted time and again before, piracy was huge in the past and you just need to look at how recording devices and recording media where sold, people sure weren't buying VHS tapes to create their own products all the time, they sure didn't buy all those 8-Tracks and Cassettes to record themselves.

Hardware manufacturers and ISP's made billions and you punk couldn't make a dime, why didn't you go out there and made your own recording devices to sell? why didn't you make yoru own ISP to create your own fiefdom? why do you want to ride in others people success? why can't you build your own, after all is that what you tell others isn't it, so go out there and build your own hardware to sell, build your own ISP and put your own rules there, I don't see hardware manufacturers complaining about Ford making a profit on their hardware, I don't see hardware manufacturers trying to make Google, Facebook and Yahoo pay them licenses for ever do you? Do you see car manufacturers trying to make taxi drivers pay them every year a percentage of their earnings? do you see car manufacturers trying to make truck drivers pay them licenses for every cargo they deliver? no the only people who do that is the parasites from the entertainment industry.

And we could have very cheap Healthcare, but there would be a need for people to organize and find their own solutions which I don't think the actual generation is capable of, they like you expect others do it for them and that is sad.
Socialism is what you want to implement, a center that controls everything and don't let others find their own solutions it didn't work for communism it sure won't work for ya.

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It is irrelevant where the incentive comes from, as long as it is there, under fair terms. So my question to you is - where is it?

Well people tried to show you and you call them names and say they are delusional, but they are the ones making a living why you keep complaining about everything.

If you can't sell CD's anymore sell T-Shirts, that can get a higher price and higher margins, for all I know suscessfull artists already sell apparel, books, posters, coffee mugs, figurines and so forth there is no lack of revenue streams to tap into it and now there is something of a revival of live shows that people are willing to go see that its a billion dollar market, will people stop producing music because they lost CD revenues that is just stupid there are millions to be made in other areas that is why piracy will not stop you morons from continuing to make crap ever and you know it, you just like to lie to everyone to try and convince people that they are being naughty, when the creepy, lying bastard screw up is you, that gets owned every time.

Heck take your own advice, if you don't like it move to somewhere else where there is no piracy, maybe you could move to mars or something.

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"If you can't sell CD's anymore sell T-Shirts"

Finally someone skipped the CwF+RtB+WtF thing and went straight to the point :). We got beyond the lame thesis above. Art is no longer needed. We need t-shirts. We respect them, for they have value to us.

However, this creepy lying bastard stays safe in civilized world, that is taking legal measures against piracy - if you like it or not. Unfortunately too late, and not on behalf of the artists. Nothing ever changes...

However, this creepy lying bastard stays safe in civilized world, that is taking legal measures against piracy - if you like it or not. Unfortunately too late, and not on behalf of the artists. Nothing ever changes...

Who cares, if I want to pirate something not you nor any government will stop me from doing so.
Further I don't care about your rights, they ended in the front of my door, inside my home I make the rules not you, not the U.S. government, not any f'ing government can you understand that?

And if you can't find other streams of revenue, then you are no Bono and you should write a hit song or something before start complaining go work for a change.

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Nah.. I can't leave this one out. Free TV?? What store gives those away? Is the programming on them free of adverts? Can you get free HBO? Cable? IPTV? Mobile TV?

Finally.. It may come as a surprise, but with every blank CD, DVD, motherboard, TV set, truck, sports car or medicine pill you pay for patent rights. I know you wouldn't cuz its IP, but a truck (design) is so much harder to steal, isn't it?

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Nah.. I can't leave this one out. Free TV?? What store gives those away? Is the programming on them free of adverts? Can you get free HBO? Cable? IPTV? Mobile TV?

Do any body take money out of their wallets to watch free over the air TV?

Who knew LoL

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Finally.. It may come as a surprise, but with every blank CD, DVD, motherboard, TV set, truck, sports car or medicine pill you pay for patent rights. I know you wouldn't cuz its IP, but a truck (design) is so much harder to steal, isn't it?

Do truckers pay a percentage of their cargos deliveries for car manufacturers?

Who knew OMFG you are so smart I want to be just like you when I grow up in the next reincarnation LoL

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Agreed on the cost of creating content. Just yesterday I submitted to get into a Centercode beta for a system of easily creating new music. We'll see if it makes scores (which would be a bonus) as well as actual tracks. Quality is my biggest worry on it.

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Some of it has been debunked, some of it has been proven less than honest

Several studies have backed up what Bas says here. Not just his own data, but data among several studies, done over several years, in many different parts of the Western world. It has not been "debunked" nor even shown to be "less than honest." Those descriptions are better given to studies commissioned by organizations who have a fiduciary interest in stronger IP laws.

There is no indication that they would buy more, buy less, or anything else,

You are absolutely right about this...

only proof that the pirates are the same small group of people who have a high interest in music, regardless of piracy.

...but absolutely wrong about this. That is your conclusion - one which you yourself are admitting cannot be made, in the very same sentence no less. The only thing the data shows is a corrolation between piracy and music purchases. That's it. Correlation does not show causation. It could be that they pirate because they are "superfans," or it could be that they are "superfans" because they pirate. Or neither.

My guess is that it's a reciprocal causation; a kind of snowball effect. A person, who otherwise would be a casual consumer, is turned into a fan, because the ability to pirate makes more music available to them, thus generating more interest in music overall. This interest increases the tendency both to pirate music, and to purchase it. So, on the one hand, people who are already fans would probably make more purchases if they could not pirate; but without piracy, there would be far fewer fans, thus fewer purchases overall.

Even if my guess is wrong, one thing is shown by this (and all other) data: people who are pirates are also people who are the music industry's best customers.

There is no indication that their buying habits are any different from the same group 20 years ago. Nobody has been able to explain away that issue.

You're joking, right? Nearly every study of consumer habits has explained how buying habits have shifted dramatically. Put simply, there has been no reduction in individual music purchases - by unit, music sales have increased every year. What has fallen has been profits from these purchases. This is because buying habits have shifted from buying album-based, physical media (CD's), to purchasing a la carte digital media (iTunes or Amazon downloads). I've yet to find a single study that shows otherwise.

And it's no wonder the decline in CD sales have resulted in decline in profits. CD's were deliberately overpriced because consumers didn't have other purchasing choices. Simply put, the 90's boom from CD sales is a byproduct of an industry cabal that could effectively function as gatekeepers. When you're a monopolistic cabal, it's easy to do things like illegal price fixing, deliberately kill singles, or abandon independent retailers for chain stores like Wal-Mart. The drop in profits is a direct result of greater consumer choice.

The digital revolution has shifted purchasing habits in other, more profound, ways as well. For example, look at the conclusions from this 2007 study from Ipsos:

Data suggest that the answer lies in what could be referred to as the "impulse gap." Namely – that the increase in the number of digital music acquisition options, including on-demand downloading and easy unfettered copying, have slowly eaten away at consumer impulse music purchases – thus creating a gap in revenue. Where in the past someone may have purchased a CD from a new or unfamiliar artist on a whim, they are increasingly more likely to digitally sample the music before deciding to make a full physical CD purchase.

So, please, stop with the casual dismissals. You're not adding anything to the conversation.

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I think this anonymous coward was being sarcastic (and was thus actually praising this work), based on the quote "reality failed to kick in BEFORE I panned what seems to be *fairly reasonable research*".

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No one said 'free TV,' so that's just you twisting words to appear clever. Free programming? Sure, there's tons of that. It's paid for by the commercials they add to the content. But WE still don't pay a penny for that content, thus 'free.' Please, save the argument about the commercials for someone else, or some other forum. A good many of us have known since we were wee little tots that the commercials are what pays for the programs, but these days most get cable or satellite TV, which they pay big bucks for, the my question to you is this: Why are we still being bombarded with commercials if we pay for the content through our subscriptions?

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Profit is not the primary motivation for creation. Making enough of a living to keep on creating is. When music, movies, and all that sells for nothing, what is paying to keep them creating? Nothing. They have to get a j-o-b to be able to afford a couple of hours a week to make music. Or they have to take it all on the road and hope to sell enough tickets to pay a living, pay for their family, whatever.

There are tons of very good musicians who make their livings pushing boxes and shuffling paper, because there is no place in the music world for them anymore.

Re: herp derp hderp dreph erph ep herp herp erh derpd duuurrrrrrrr

That's right legion of Anonymous Cowards. You keep fighting that holy war. I know when I'm presented with such things as facts or papers from the academic community which are held at high approval I scoff at them and instead make up my own facts. It's why I am the proud owner of such prestigious degrees from the University of My Ass. Which I am a star student of btw.

What has such things as thesis papers and academics given us anyway? It's why I choose to disbelieve literally everything they write. It's why I am so factually inclined to believe such truths as Creationism being the one true origin of man and cell phones being Cancer-Access-Points (CAPs). Unlike what those so-called Universities and their papers would tell you, pffft, those FLUNKIES.

Besides, the paper is clearly flawed, it implies that people who steal are more likely to buy. This has to be in error, because stealing is exactly like pirating music. I really don't have much more to say on the matter, so pretend that I instead inserted a five-paragraph rant here filled with anecdotal evidence (the strongest and most fail-proof kind of evidence) which is laced with plenty of trustworthy phrases like "Should have", "Could have", and "Ought to be"s. Because when I make a decision, I don't base it on fickle facts, I base it on "Ought to be"s.

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When music, movies, and all that sells for nothing, what is paying to keep them creating? Nothing.

That assumes, of course, that selling copies of "all that" is your only possible revenue stream. Of course, it's not.

If you're a musician, it never was. Recording artists have always made more money from live shows than they have from record sales. You also have merchandise, gear sponsorships, licensing music for television or video games, advertising, etc. And that's just if the musician is solely a musician - if their name acts as a brand, they can market it in other industries (perfume, clothing, etc).

There are tons of very good musicians who make their livings pushing boxes and shuffling paper, because there is no place in the music world for them anymore.

There have always been tons of very good musicians who make their livings pushing boxes and shuffling paper. But the percentage is slightly lower now, since the music industry as a whole is growing, and more of that money is going to the artists themselves than in the past.

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"Hm..yes.. I think it was because people wanted to buy em discs. The sheet music market failed to deliver. Point being?"

Now they don't want to buy those discs, like they stopped buying into the once-lucrative sheet music market. Not their fault if you fail to offer them the product they do want to buy - you can't force them to buy CDs if they don't want them, nor full albums instead of iTunes singles if they don't want those.

"You would be surprised how greedy artists can get. They want to eat daily and pay the electricity bills - or their amps won't work."

Ah, you're getting obnoxious, you seem to fail to comprehend any situation that involves more than 2 possible outcomes or "sides" and you try to misrepresent anything I say to fit your simplistic preconceptions. At least I know which of the regular ACs I'm communicating with...

"There WERE many ways... Now there are ways to make money WITH piracy. It only ends up in the wrong pocket."

So, selling physical copies, live gigs, merchandising, licensing and the like have stopped existing now? That's strange. Although, I do agree there's more money to be made "with piracy", I don't think that artists who successfully leverage free music into more profit actually count as "pirates".

"Don't. Don't buy it. DOn't steal it either. Just ignore it. It will do mirracles on the market."

I won't I'll listen to the free stuff out there and continue paying my Spotify subscription, buy DVDs & Blu Rays, books and video games. Just as I do now. No piracy involved. Life must be scary for you, assuming that people are stealing if they don't pay through the nose every time you're selling something.

"You like to stare at blanks screens, don't you?"

No, your comments are providing enough free entertainment for me now, as is the legally free radio I'm listening to in the background as I type this and the Flickchart tab I'm playing with. Not to mention the free software I'm using to browse the web and play the podcast.

It's almost as though you can make money without demanding upfront payment from everybody who uses your product...

"No. They should exploit 3rd party without mercy until there is none left. After that, they can start another business. Supermarket chain. Not that many around."

Wow, argument ad absurdum I think that's called? Not sure, my Latin is rusty but it sure is an absurd place to take it.

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Because it's silly. Just because they say they buy more than a person that rarely consumes music means zilch. Does piracy cause them to buy more music? Of course not. If that were true then record sales would be through the roof. You don't need piracy to discover new music in the internet age.

People ripped off music because until now there were no repercussions and nobody was stopping them.

You boneheads have been using the same stupid rationalizations and analogies for a decade now and they've all been shown to completely bereft of any logic or validity.

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"Just because they say they buy more than a person that rarely consumes music means zilch"

Ah, the old "I don't like what they're saying so I'll assume they're lying". Would you make the same assertion if the results went the way you like, or do you only listen to studies that back up your own assumptions? I'd be happy to accept an unbiased study that proved the opposite with solid methodology. I don't know of one that exists, however.

"If that were true then record sales would be through the roof."

That's why all those pirate tapes the industry was scared of in the 80s led to a massive drop in sales by the 90s, and the industry collapsed once people started duplicating CD-Rs. Oh wait, sales constantly increased because they offered products people wanted to buy in ways they wished to buy them. My mistake.

Sales have only dropped when the pirates were servicing their customers needs better than the labels themselves - and no, price is nowhere near the only factor involved.

"You don't need piracy to discover new music in the internet age."

Yeah, I'll just check out the music from that band recommended to me on Pandora. Wait, I'm not allowed to because I'm in the wrong country. OK, what about turntable.fm? Nope, same problem. YouTube? Nope, the label restricted it and removed region-free copies as "copyright violations". Spotify? Oh, they haven't licensed the album there in my country yet. Amazon? Nope, same again.

Wait, there's a torrent, let's check that one out, they have no problems letting me find out if I like the band before I decide whether to buy it...

If the labels tried joining the internet age, you might be right. Sadly, they're still a long way off.

That's right, I am indeed going to have some doubts believing a person who has no problem ripping off musicians.

Your clumsy attempt at saying, "but, but what about people in countries that don't get..." is ridiculous. Piracy rates are high in countries where a person has plenty of avenues of auditioning a song or album.

People want something but have been able to get away with ripping it off.

That's it. And no amount of misdirection is going to change that obvious fact.

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"Now they don't want to buy those discs, like they stopped buying into the once-lucrative sheet music market."

Yes, only this time they stopped buying since they got them free. Call it CD's, LP's or files - it was seemingly free stuff.

"Ah, you're getting obnoxious, you seem to fail to comprehend any situation that involves more than 2 possible outcomes or "sides" and you try to misrepresent anything I say to fit your simplistic preconceptions. "

All that just for trying to make my amp work again? Capitalism is a cruel game indeed :)

"No, your comments are providing enough free entertainment for me now, as is the legally free radio I'm listening to in the background as I type this and the Flickchart tab I'm playing with. Not to mention the free software I'm using to browse the web and play the podcast."

Its OK. As long as you believe all those goodies are free...why rock the boat?

"Wow, argument ad absurdum I think that's called?"

I got a new, more absurd one even, just to entertain you. I am trying to sell you a piece of music recorded in floating rubber for 7.3 million $.

My deep believe is that I have the right to do so. I might not sell much and it might sound like a stupid idea, but that doesn't give anyone the right to confiscate my ducky.

On the other hand, I am fascinated to find so many people here, that simply refuse to accept the concept of property. Do you usualy share yours with the poor or something like that? Commendable!

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I can tell you from my experience, I personally buy almost no music since I stopped pirating. When I do buy music it's from an artist I get to know personally, which isn't to say I don't wish them success or wouldn't want to have them become wildly famous. The point is that before now, musicians were valuable to me, they were something that I enjoyed because it held a significance to me and that's what you miss. The music itself has no value, save that which is put into it by the consumer. I can shovel piles of dirt all day long, but unless someone finds value in that action, there is no expectation of receiving payment. You have your whole worldview backwards, it's not the creator that's important, it's the consumer. Adam Smith didn't write The Wealth of Nations saying that creators should be protected, he wrote it saying that the consumer should be protected and that only limited government should be involved for the protection of the consumer. Nowhere in the entire history of humanity has there been such an overly entitled group of people than creatives in the 20th and 21st century America.

Little history lesson for you, when man was still running around during the last ice age, the species survived through sharing of knowledge, they created cave paintings, put up markers and shared knowledge with one another, because even primitive man understood the true value of knowledge is in sharing it. Sure people fought over finite resources and still do, but that which cold be freely given; music, culture, knowledge have been shared, with notable exceptions such as the masons, who were viewed with mistrust. Think about that for a moment, we have a word for people who don't engage with the group, paranoia, and its implications are not usually fondly looked upon.

As for repercussions, you clearly don't understand how the internet works. Only those with limited imagination think that you can lock up anything if someone wants it badly enough. Seriously, just encrypting data would be enough to prevent media companies from knowing what is being downloaded.

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Pirates financed every album since there was a market, they were the ones that created the market in the first place.

If not for pirates there wouldn't be a need for music and consequently sales, they are the ones that want it that baddly, they are the ones that buy every scrap of memorabilia they can afford to, they are the ones that travel great distances sometimes at great expense and personal sacrifice to go see a show of their idol.

Those are the people you call names and try to humiliate, those are the people you try to criminalize.

If it was not for them you wouldn't be able to sell anything because nobody would care.

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"You also have merchandise, gear sponsorships, licensing music for television or video games, advertising, etc"

Deep insight, I would strongly recommend a music career to you.

I am not that good. But anyway.. can I please get a chance to choose my stupid worthless business models in any way I like to? I want to at least TRY to sell my records under fair terms before some connoisseur, powered by your theories starts "sharing" them?

I demand the right to remain stupid in any way I like to. I will let you do the same. You have the potential.

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Should everyone who hears music in public space have to cover their ears so not to infringe on your alleged rights?

Or should they go running to the ATM to pay you crazy people?

Of course not, nor should people be criminalized for sharing music, a musician is a performer and he should be paid to perform not for last performances made a 100 years ago, that I won't pay a dime and neither are the majority of people going to pay no matter what you think.

And you keep trying to make people believe that imaginary property is anything like real property, people are not that stupid, they know the difference.

Nobody have the right to ask for money for work they didn't perform, nobody has the right to appropriate a common shared space to themselves and yet here we are with a bum that thinks he owns the place.

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You see I do remember that Fornicating Under the Consent of the King meant that everybody had to ask permission to the king before having sex they had to get a paper and affix it to the door, today people laugh at that and I bet many people just ignored such crazy laws all the time, just like copyright laws that are absurd are getting ignore and for good reason.

Besides you are not even capable to enforce your imaginary property properly so you basically don't deserve any rights pertaining to that for which you have no control of.

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Deep insight, I would strongly recommend a music career to you.

Been there, done that. I'm not a financial success of course, but I also play very, very unpopular music. (That's by design, so I'm not complaining.) However, most of my friends are in bands, and some of them make a living from it. Why do you think I care about this so much?

can I please get a chance to choose my stupid worthless business models in any way I like to?

Nothing is stopping you. What is stopping you from making money is the fact that those business models aren't any good. You can still try them, of course, but when your "stupid worthless business models" fail, don't come crying to me about piracy.

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"What total BS. What albums and tours have the pirate sites bankrolled?"

Wow, you really are a single-minded simpleton, aren't you? That's nothing like what I was referring to, and you should know it.

The services I was referring to was providing the music the customer wants, without DRM, windowing or regional restriction, in the format and quality the customer desires. The music industry still isn't offering that.

If the pirates are offering digital copies of AC/DC, or FLAC copies of the Lady Gaga album, or copies of an album that's finished but won't be on sale for another 6 months, that's a problem where the pirates are offering something the industry refuses to. Again, I'm not justifying the piracy, just pointing out some of the many, many problem with the industry's approach.

If pirates are able to offer a service or product that the music industry isn't, people will pirate. Until the industry addresses this, piracy won't go away. When the only difference between the two is the price, then you can start whining about "stealing" - until then, they're just the customers you refuse to service.

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"What total BS. What albums and tours have the pirate sites bankrolled?"

Wow, you really are a single-minded simpleton, aren't you? That's nothing like what I was referring to, and you should know it.

The services I was referring to was providing the music the customer wants, without DRM, windowing or regional restriction, in the format and quality the customer desires. The music industry still isn't offering that.

If the pirates are offering digital copies of AC/DC, or FLAC copies of the Lady Gaga album, or copies of an album that's finished but won't be on sale for another 6 months, that's a problem where the pirates are offering something the industry refuses to. Again, I'm not justifying the piracy, just pointing out some of the many, many problem with the industry's approach.

If pirates are able to offer a service or product that the music industry isn't, people will pirate. Until the industry addresses this, piracy won't go away. When the only difference between the two is the price, then you can start whining about "stealing" - until then, they're just the customers you refuse to service.

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"All that just for trying to make my amp work again? Capitalism is a cruel game indeed :)"

Yes it is. People who run businesses on failed business models that don't make money have the adapt or starve. Why should your industry be any different? If my industry (online gaming) started to fail, would I be right in trying to shut down home poker games and friendly wagers? I don't think so.

"Its OK. As long as you believe all those goodies are free...why rock the boat?"

Since they are free at the point of access... yes I will believe that. Why shouldn't I? After all, if people are being paid yet they've managed to come up with a workable business model to do that without charging directly, why should I rock the boat?

"I am fascinated to find so many people here, that simply refuse to accept the concept of property."

So would I be, if that concept was in issue. Most here, myself included, are seeing ways in which the "pirates" are servicing your industry better than you are, and also hundreds of missed niches that go unserviced because "lost" sales of CDs are all you care about. Yet, you refuse to listen and instead accuse everybody who disagrees of piracy, and spend your time building threadbare strawmen to attack.

"Do you usualy share yours with the poor or something like that? "

Actually, I do share the CDs, DVDs, Blu Rays, video games, books and magazines I bought with friends and colleagues - just as I did before the internet. I don't remember people trying to shut down my free speech rights and fine me thousands of dollars back then though.

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Thanks for backing me up here, Karl. If people would actually read the study, they could see that their comments are really besides the point. I'm not so interested in the discussion about whether piracy is good, bad, evil, destroying music, a great development for creativity, etc.

The goal of my thesis is to create a model so that we can finally move beyond that discussion. :-)

Arguing on the internet is nice, but it's never going to solve business problems.

I guess you're being sarcastic, but still want to set a couple of things straight.

First of all, I'm not an academic. I'm a marketing and business consultant.

Secondly, regarding this quote:

"Besides, the paper is clearly flawed, it implies that people who steal are more likely to buy."

That is really not what it implies or what I set out to look into. I just wanted to know what it is that motivates certain groups in terms of consuming music and how those dynamics can be used in order to make money. One of these groups is pirates, but I researched much, much more than just piracy.

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Wow, you really are a single-minded simpleton, aren't you?

Wow, you're really a stereotypical freetard that can't grasp the concept that things are not created in a vacuum. Even when it's specifically pointed out to you in a debate on an internet message board.

Good luck with the rest of your life living as a person that will never have an impact on anything.

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Nor do you understand the concept that pirates are the biggest consumers you will ever have, because the others don't care and don't consume, only people interested in that crap pirate and buy anything. I for example will never give your kind any money ever.

I has been 10 years since the last time I bought a CD, I don't even pirate music anymore and I don't know of anyone who downloads music anymore, music piracy has died, and the profits still didn't go up, now that is good news that means people are not buying that crap and not financing the idiots from the industry.

This thread is already pretty long, but I want to mention my own anecdote. In college, I found out about led zeppelin (yes, I know, I'm not the only one...), and what did I do? I started by requesting every single song by calling in to the station, and then recording 3 songs a night during "get the led out" at 8:00. Then, after compiling several dozen songs onto my own tapes, I started scrounging the money to buy the tapes, and I got all the tapes. Then, when CDs came out, I did the same thing with CDs. (Also having picked up some vinyl, as well as some Page/Plant concerts, and t-shirts). Then, when CDs became more tiresome to deal with, I ditched that all, and pirated their discography for convenience.

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It is a mistake to say that "piracy is servicing the market better", because that is really a very small part of the piracy market. What piracy is doing is kicking the crap out of the content business by giving it all away, pure and simple.

Claiming it is somehow doing a better job is entirely misleading. If pirate sites were actually paying for content, they would have been eaten alive by itunes and it's ilk already. Only the price advantage makes piracy sites any better at this point.

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For the record is not only price that attracts people to pirate websites is the overall experience, nobody is going to use Hulu and have to configure proxies and keep finding creative ways to get around the geocraplocking that goes on, nobody will wait until next year to listen to anything to respect "exclusive" licenses that don't concern them, people get tired of 1 hour of ads or having to hear or watch the same ad again and again and again every time they click play, not to mention the DRM crap and the invasive solutions that comes with some of their offerings.

Then you keep asking why people flock to piracy havens, is not because of the price alone is because the industry is full of idiots who think they can do anything and people just need to take it, well now is time to let them have a taste of their own medicine and see if you bums like it.

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Investments in "high quality content"... those being what? What exactly does the music industry, as an entity, provide to enhance or advance the creativity or quality of an artist, besides spiffy new studios capable of digitally glossing over mediocrity and a massive hype machine with decades of experience in how to tell consumers what to think and like and buy while simultaneously punching them in the balls and taking their wallet? There were crap composers writing crap music in seedy theaters during the time of Mozart, in bars and clubs and street corners in the time of Coltrane and the Stones. These artists didn't become creative geniuses because of financial investment, it's quite appropriately the opposite. If anything the industry whose death we freetards vehemently desire has a long and glorious history of taking creative geniuses and twisting and cowing and whittling them down into a sickly-sweet contrived mockeries known as "main stream" and "radio-friendly". And it's not just music... "investment" is the primary reason for pharmaceutical prices on this year's newest drug (aka last year's drug + a little acetaminophen), and we all know what a spectacular multi-billion-dollar sham that is.

Creativity and creators aren't dying out. What needs to die is the daydream of the rock star, the rap star, the mythological character who sang to us as kids about how they were using the money we scraped together and spent on their album to buy useless toys, cars they won't drive and overpriced liquor they're simply pouring out on the half-naked bodies of women we'll never meet. What needs to die is the belief of so many young musicians that they just needed to be noticed, get that one album to take off ... then the record label would take care of them, parties and publicity shoots, and whatever else they do with the rest of their lives they would always live comfortably on royalties.

We work for a living, day after day... we the consumers, the fans, the pirates (well most of them), and in this new digital age entertainers will too. A more direct link between creator and consumer, with middle men and their bloated sense of entitlement left bleeding in a ditch. It will mean more effort spent engaging fans instead of taking them for granted, more bundled content and personalized additions, more live performances. Those musicians who have successfully profited from NEW business models have demonstrated this perfectly... hard work, building a rabid fanbase, acting like a professional musician instead of a "celebrity", and you will always have people willing to buy your wares.

If Youtube and the like produce a mountain of worthless web noise, it's because every time someone attempts to create a functional system to introduce potential consumers to music they might like and might buy the record industry attempts to *destroy* them. No amount of noise will keep the truly great creators from rising to the top... they may not make as much as they would have under the isolate-and-hype business model of the last 50 years, but they will be successful, wealthy and respected. And I'd rather have to sift through a little mud than have some pompous ass tell me what album I'm supposed to buy this week.

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Bas, with due respect, I think your thesis is pretty much techdirt 101. You could pretty much just lift the site, put it in a thesis, and most professors would go gaga over it. Techdirt is a wonderful theoretical site that truly does appeal to the scholarly types, I guess.

However, as good grade isn't a confirmation that you are right, only that you touched all the bases and presented enough truth for people to buy your argument. But as has been pointed out through this discussion, some of the assumptions made here require some jumps of logic, and requires that you ignore a whole bunch of history to get there.

Your thesis isn't a bad thesis, you got a good mark for a reason. Then again, a friend of mine got a really good mark on one about Slavery having been good for the black man... so go figure!

Here's an interesting outlier: a 2009 IFPI report claimed the opposite, that file-sharers do not buy more music. However, Mark Mulligan - V.P. of Jupiter Research, the firm that actually conducted the survey in question - flatly contradicted IFPI's conclusion: "A significant share of music buyers are file sharers also. These music buyers tend to be higher spending music buyers."

In any case, there is not all that much difference between pirates and non-pirates in that graph (definitions as mentioned in the article). Note that this survey was conducted about 1.5 year ago. I'm convinced things like this are changing rapidly, which is why I tried to focus more on the trends than on the small facts (but then I knew this graph would provoke a good discussion on techdirt ;-)).

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Oh, goodie, fact-challenged Ad Hominem A.C. is at it again.

According to noise musician man, pirate sites don't care about the money. It's a totally altruistic situation. Yup, you heard it here first.

Note that I said "don't make any money," not "don't care about money." Sure, some of the pirate sites want to make money. But the money they actually do make is pitiful. (Even the Pirate Bay admits that they don't turn a profit.)

And yes, depending on how you define "pirate site," I'd say most do it because they're fans. For example, all those music sharing blogs. Do you honestly believe they're raking it in from the paltry amount they make from banner ads? No, of course not. They do it because they like music, and want to share it; the ads simply offset the costs of running the blogs - though usually it's still a net loss.

Neither do record labels anymore.

Yet they still try to fund artists.

They don't try to "fund artists." They try to make money. The idea that record labels are "doing it for the artists" is laughable. They have a well-documented and decades-old agenda of screwing over artists whenever they can get away with it. It's not because they're "evil," of course; it's because they're a business, and every business will shaft their workers if it will turn a profit. But let's not pretend for one second that the labels' motives are any more altruistic than the pirates'.

So if you ask me who supports music more, your average kid running a sharing blog, or your average record executive, I'll go with the kid. No question.

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Possible scenario?

Did I read that pirates legitimately buy more music than any other group?
Could this be because because "any other group" includes people who will buy illegitimately from the pirates at a reduced price?

Customer is happy to get quality at half price.
Pirate is rich after paying for just one copy at full price.
Record company lose out on sales.
Track doesn't get the chart position that it's combined legit and illegit sales deserve.
Less new listeners get to hear artist on the radio due to poor chart placement.
Less people hear about the artist so less merchandise is sold, impacting on potential artist/record company earnings.
Artist tours in smaller venues as a result of poor (legit) sales figures.
Record company drops artist after not hitting required income related targets.
Local McDonalds receives another application from an out of work musician trying to make ends meet.....

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"Wow, you're really a stereotypical freetard"

If by "freetard" you mean "paying customer of the music industry who's trying desperately to point out the obvious mistakes that are costing the industry millions" then yes, I'm a freetard and proud of it. If you mean something else, you haven't been reading a damn word I've actually been saying.

"Good luck with the rest of your life living as a person that will never have an impact on anything."

I have a fulfilling career, making enough money to both make my life comfortable and to reward those who provide me with quality entertainment. My life is not so empty that I have to troll blogs that disagree with my views, and I learn something occasionally from those who do. Looks like I'm better off than you, by a long shot.

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"Or have I got this completely wrong?"

Only on one of your basic assumptions - people *buy* pirated music? Even in the Spanish holiday resort close to where I live, where Chinese and African immigrants spend their days selling counterfeit handbags and DVDs to tourists (closest legit outlet for either is over 20 miles away), they don' bother selling DVDs.

The only recent example I can think of where people actually paid for their pirated copies was AllOfMP3, and not only was that technically legal under Russian law, it's not running any more.